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Regional themes > Poverty reduction frameworks and critiques Last update: 2020-11-27  

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Struggling to be heard
Democratising the World Bank and IMF


Jennie Richmond and Paul Ladd
Research by Angela Wood and additional text by Liz Stuart
Edited by Lucy Southwood and Jane Lewis.

Christian Aid

Posted with permission of Paul Ladd, Christian Aid, London
[Complete version - 263Kb ~ 1 min (19 pages)]     [ Share with a friend  ]

Executive summary

The World Bank and the International Monetary Fund (IMF) call for democracy, openness and accountability in the developing countries where they work. But their own activities fall far short of such an ideal. The loans that they make to poor countries lack transparency, and their board structures are far from democratic. Their leaders are only selected from the United States and Europe, and never from the developing world.

Instead of one country member, one vote, power is allocated according to how wealthy the countries are. This means that poor nations – where the World Bank and IMF wield the most power – have the least say in the way the institutions are run and the decisions they take. The US is the only country with enough votes to block board decisions on its own. By contrast, the world’s poorest countries cannot block a decision even if they all join together.

Many of the richest countries – including the US, UK, Germany, France and Japan – each have a seat to themselves on the boards. Meanwhile, poor countries are bundled together in large groups represented by one individual. For example, in each of the boards of the World Bank and IMF, just two board members represent a total of 44 African countries. It is a near-impossible job to be familiar with, let alone fight for, all the issues that are important to all the countries they represent.

Rather than supporting democracy, the World Bank and IMF can often undermine it. In its February 2003 budget, the government of Ghana announced increases in the tax on imported rice and poultry. This was part of a broad approach to improve the lives and businesses of Ghanaian farmers, and to counter the heavily subsided imports from the US and Europe. Although the tariff increases were well within the limits set by the World Trade Organisation – a body established to expand trade within a set of international agreements – they were suspended after a series of hurried meetings between the IMF and the government. This increase in tariffs would have been against all previous advice given to the government by the IMF and other donors. The Ghanaian parliament has yet to be informed about the suspension.

Decisions that can transform the lives of hundreds of thousands of people – for worse, as well as for better – are frequently made behind closed doors. For example, when the World Bank provided funding for a dam in Lesotho in 1998, the communities involved knew little about the deal struck between their government and the Bank. Partly because they weren’t able to feed in their views, the project has led to problems over access to water and land.

Christian Aid believes that both institutions can play a role in supporting growth and development around the world. But it is calling for a change in the way in which they work, bringing them into line with what we expect from modern, international organisations. Firstly, poor countries must have a bigger say in how they are run. They should have more seats at the table; and rich countries should have correspondingly fewer. The voting power of poor countries must also be strengthened.

Next, the leaders of the World Bank and IMF should be selected on merit, regardless of nationality: these posts should not be reserved for the most powerful countries. Money must also be made available to increase staffing levels and capacity in developing countries’ offices at the World Bank and IMF.

Finally, all board decisions affecting developing countries should be written up in detail and published within two weeks, in print and on the internet, allowing people to monitor who votes for what. Details of those decisions must be widely publicised in the countries where they will come into effect, and scrutinised by national parliaments.

Only then will poor countries and their peoples have a proper say on the work of the World Bank and IMF, contributing in turn to programmes that are more effective in promoting growth and poverty reduction.

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